Financial News

Huntsworth Boss To Step Down After Pay Revolt

The Conservative peer who heads one of the biggest public relations groups listed on the London stock market is to step down weeks after a major revolt by shareholders over his pay package.

Sky News understands that Lord Chadlington, chief executive of Huntsworth and a close ally of David Cameron, is to retire from the owner of prominent communications agencies such as Citigate Dewe Rogerson and Red.

A statement confirming his exit could be made as soon as Monday, when Huntsworth is due to report half-year results for the six months to June 30, according to banking sources.

The precise timing of Lord Chadlington's departure is unclear, but the announcement is intriguing because it comes less than four months after Lord Myners, the former City Minister, was appointed as Huntsworth's chairman.

Lord Myners has been a long-standing advocate of strong boardroom governance, and is said to have been contacted by a number of leading Huntsworth shareholders since his arrival amid discontent about Lord Chadlington's £1m-plus pay deal.

At the company's annual meeting in June, more than 30% of investors expressed their disillusionment with the chief executive by abstaining on his re-election to the board.

Nearly a quarter of shareholders voted against last year's remuneration report, while almost a third opposed Huntsworth's pay policies for the next three years.

The departure of Lord Chadlington, who is also the president of Mr Cameron's Conservative constituency association, will spell the end of a chapter of one of the most prominent careers in the UK's PR industry.

Now 72, he founded the Shandwick agency four decades ago, turning it into a major industry force, and built Huntsworth through a string of acquisitions which also included Grayling, another leading outfit.

There have been tensions in the company's boardroom in recent times, with Richard Sharp, Lord Myners' predecessor, and Joe MacHale, another board member, stepping down this year partly in protest at Lord Chadlington's remuneration.

The Huntsworth boss is unusual among the heads of listed companies for having a guaranteed contractual entitlement to an annual pay rise and bonus.

The business has been performing poorly, however, with a recent profit warning contributing to a 35% fall in the share price during the past year, giving it a market capitalisation of just £133.1m.

The arrival of Lord Myners adds an unexpected layer of intrigue to a relatively low-profile listed company.

Huntsworth is also a rarity among London-quoted businesses in having a Chinese peer as its largest shareholder.

Blue Focus, one of Asia's biggest PR groups, paid £36.5m for a stake of almost 20% just over a year ago.

Last month, it emerged that Matthew Freud, another major figure in the UK PR industry, had snapped up a 3% stake in Huntsworth, a purchase he described as "somewhere between a hunch and a punt".